NEW DELHI: Amid demands that there should be greater laxity in foreign direct investment with the cable television sector going digital and the FM radio on the threshold of its third phase, the Information and Broadcasting Ministry has summoned a meeting of stakeholders on the subject later this week.
The meeting is expected to be presided over by I& B Secretary Uday Kumar Varma and will be attended by officials of the Telecom Regulatory Authority of India, which had earlier worked on a consultation paper on the issue.
The meeting on 29 June is expected to discuss the viewpoints of various stakeholders on increasing FDI in the broadcasting sector.
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Under the existing pattern of FDI approved by the Union Cabinet Committee on Economic Affairs in September last year, teleports (setting up uplinking HUBs/Teleports): Direct to Home (DTH); and Cable Networks (Multi-System-Operators operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability) can get foreign direct investment of up to 74 per cent.
The Cabinet Committee had said these sectors, which until then got take FDI of up to 49 percent, will be permitted to take FDI up to 49 per cent under the automatic route and beyond that under the Government route.
Similarly, it was decided that mobile television, which there is no specific dispensation at present, will be permitted FDI up to 74 per cent of which 49 per cent can be permitted under the automatic route.
The CCEA approved the proposal of the Department of Industrial Policy and Promotion for Review of the policy on Foreign Investment in companies operating in the Broadcasting Sector. The changes were in keeping with recommendations made by the Telecom Regulatory Authority of India which had presented its recommendations in June 2010, two years after an earlier paper on the subject in 2008.
Enhanced access to foreign investment was expected to expand the reach of broadcasting services, thereby improving accessibility of these services, and bring in international best practices. The proposal was to make the foreign investment policy for the broadcasting sector consistent with that of the telecom sector, because of the convergence of technologies involved in these two sectors, and thereby bring in greater investments into quality infrastructure for the broadcasting carriage services.
Similarly, there was no change in the limit for uplinking ‘News & Current Affairs’ TV channels / FM Radio or Non-‘News & Current Affairs’ TV Channels / Down-linking of TV Channels. The existing limit is 26 per cent foreign investment under the Government route for uplinking ‘News & Current Affairs’ TV channels / FM Radio; and 100 per cent through the Government route for Non-‘News & Current Affairs’ TV Channels / Down-linking of TV Channels.
The CCEA had decided to rationalize the methodology of calculation of direct investment and the methodology, as applicable to the telecom sector, which were made applicable across the Information and Broadcasting sector. For companies operating in the broadcasting sector, however, the foreign investment (FI) limits for different activities include different components.
Accordingly, as in the case of the telecommunications sector, the foreign investment limit in companies engaged in various activities of the I&B sector include, in addition to FDI, investment by Foreign Institutional Investors (FIIs), Non Resident Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs), American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and convertible preference shares held by foreign entities.
The existing Foreign Investment limits in companies engaged in the activity of providing broadcasting services are not uniform.
TRAI had earlier recommended different Foreign Investment limits for companies engaged in providing `carriage` and `content` services. It had also stressed the need for a holistic review of the extant Foreign Investment limits for companies operating in different segments of the broadcasting sector, in order to bring about consistency in the policy, as also to promote a level playing field between competing technologies, in view of the convergence of technologies across the telecommunication and broadcasting sectors.
Since it is possible to provide broadcasting `carriage services” using either telecommunication networks or broadcasting networks, uniformity was proposed in respect of companies providing carriage services (except cable services). For the same reason, uniformity is necessary in the method of calculation of direct foreign investment, in companies operating in the telecom and broadcasting sectors.
